Analyst Michael Sison from Wells Fargo maintained a Buy rating on Westlake Chemical (WLK – Research Report) and decreased the price target to $95.00 from $110.00.
Michael Sison has given his Buy rating due to a combination of factors that highlight Westlake Chemical’s resilience and potential for growth. Despite a challenging macroeconomic environment, Westlake Chemical has demonstrated the ability to achieve mid-single-digit quarter-over-quarter volume growth in its Housing and Infrastructure Products (HIP) segment. This growth is supported by the company’s strong brand portfolio and its position as a leading supplier to rapidly expanding national homebuilders.
Additionally, there are potential pricing tailwinds in the Performance and Essential Materials (PEM) segment, with recent increases in caustic soda prices expected to benefit the company. While pricing in some areas has been flat or declined, the overall outlook suggests potential for improved margins. Furthermore, Westlake Chemical’s exposure to tariffs is considered manageable, thanks to its compliance with USMCA regulations, which insulates its domestic operations. The combination of these factors, along with an attractive risk/reward profile, supports the Buy rating despite reduced earnings estimates.
Sison covers the Basic Materials sector, focusing on stocks such as Albemarle, Huntsman, and Sherwin-Williams Company. According to TipRanks, Sison has an average return of -1.5% and a 42.68% success rate on recommended stocks.
In another report released yesterday, Truist Financial also maintained a Buy rating on the stock with a $117.00 price target.